#1
In perfect competition, what is the number of firms?
Few large firms
One dominant firm
Many small firms
Two or three firms
#2
What is a characteristic feature of perfect competition?
Product differentiation
Barriers to entry
Price setting power
Homogeneous products
#3
Which of the following is NOT a characteristic of perfect competition?
Homogeneous products
Price setting power
Perfect information
Free entry and exit
#4
What is the relationship between marginal revenue and price in perfect competition?
MR equals price
MR is always greater than price
MR is always less than price
MR is unrelated to price
#5
What is the characteristic feature of perfect information in perfect competition?
Firms have incomplete information about market conditions
Firms have complete information about market conditions
Firms have no information about market conditions
Firms have biased information about market conditions
#6
What is the demand curve facing a firm in perfect competition?
Downward-sloping
Upward-sloping
Perfectly elastic
Perfectly inelastic
#7
In perfect competition, what is the relationship between price and marginal revenue for a firm?
Price is always greater than marginal revenue
Price equals marginal revenue
Price is less than marginal revenue
There is no relationship between price and marginal revenue
#8
What is the shape of the average revenue curve for a firm in perfect competition?
U-shaped
Downward-sloping
Upward-sloping
Horizontal
#9
In perfect competition, what is the short-run shutdown condition for a firm?
P < AVC
P > ATC
P < MC
P < MR
#10
What is the condition for allocative efficiency in perfect competition?
P = ATC
P = MC
P = AVC
P = MR
#11
What is the long-run equilibrium condition for a firm in perfect competition?
#12
What is the relationship between economic profit and zero economic profit in the long run?
Economic profit equals zero economic profit
Economic profit exceeds zero economic profit
Zero economic profit equals normal profit
Zero economic profit implies losses
#13
In perfect competition, what happens to the market price if a firm incurs losses in the short run?
The market price decreases
The market price increases
The market price remains unchanged
The market price becomes perfectly elastic
#14
In perfect competition, what happens to the number of firms in the long run if economic profit is positive?
Firms enter the market
Firms exit the market
Firms remain the same
Firms change product differentiation
#15
What is the relationship between marginal cost and average variable cost in the short run for a firm in perfect competition?
MC is always less than AVC
MC is always greater than AVC
MC intersects AVC at its minimum point
MC and AVC are parallel